​Legislative and Policy Milestones

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Building Aid & Debt Calculation Reform: In November 2025, a major step toward structural equity for small city school districts was finalized when Governor Hochul signed A.2318/S.6637 into law as Chapter 565 of the Laws of 2025.​ This law addresses a long-standing disparity by changing how debt is calculated for small city school districts. It allows these districts to subtract building aid from their debt calculation, aligning them with other fiscally independent districts across New York State.

​This change ensures a more equitable and accurate calculation of district debt and strengthens the financial position of small city school districts statewide.

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Debt Limit Reform: After decades of inequity, SCSD successfully led the effort to remove the special constitutional debt limitation that had long applied only to small city school districts. In fall 2023, New York voters approved a constitutional amendment eliminating that limitation, ensuring that small city school districts would be treated the same as all other school districts under the law.

​Chapter 596 of the Laws of 2023 subsequently established a 10 percent statutory debt limit, aligning small city school districts with other fiscally independent school districts across New York State. ​​​This reform marked a major step toward parity by removing a long-standing structural barrier to financial flexibility. SCSD has continued to build on that progress through additional legislation to further align debt calculations, including allowing small city school districts to subtract building aid from their debt computation, consistent with other districts.​

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Special Services Aid: In 2002, the Association won dedicated support for Albany, Amsterdam, Troy, Newburgh and Niagara Falls; districts remaining outside of not served by BOCES. Today, for the two small city districts that remain outside of BOCES, Albany receives $1.32 million annually and Newburgh receives $5.22 million under this aid provision.

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State Aid Reforms: For five consecutive years, SCSD’s proposals were included in the education funding formula within influenced the State Budget, driving significant increases in aid for high-need, lower-wealth districts.

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Real Property Tax Reform: The Association’s “Basic Shelter Exemption” concept directly informed the Governor’s STAR program, providing relief to homeowners across New York.

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IDA Reform: The Association authored Chapter 356 of the Laws of 1993, mandating the sharing of PILOT payments with school districts and ensuring district representation on IDA boards generating tens of millions of dollars in additional revenue annually.

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HURD Aid: In 1987, SCSD preserved $100 million annually in HURD Aid, later freezing its phase-out from 1994 to 2007. This effort cumulatively saved districts hundreds of millions in state revenue.

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Litigation and Advocacy

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Campaign for Fiscal Equity (CFE): The Association filed multiple amicus briefs in support of the landmark CFE case, which ultimately established Foundation Aid.

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Maisto et al. v. State of New York: Since its inception, SCSD has supported the student and parent plaintiffs in Maisto et al. v. State of New York, the landmark small city school funding case brought on behalf of students in eight small city school districts: Jamestown, Kingston, Mount Vernon, Newburgh, Niagara Falls, Port Jervis, Poughkeepsie and Utica. Filed in 2008, the case challenges whether New York State has met its constitutional obligation to provide students in these districts with the opportunity for a sound basic education.

 

A major turning point came in 2017, when the Appellate Division reinstated the case and made clear that the plaintiffs had stated a viable constitutional claim. That progress culminated on May 27, 2021, when the Appellate Division, Third Department issued a unanimous decision in favor of the 80 parent and student plaintiffs, holding that the State had violated Article XI, Section 1 of the New York Constitution by failing to provide at-risk students in the Maisto districts with the opportunity for a sound basic education because of inadequate state funding.​ 

 

The significance of Maisto extends well beyond the eight plaintiff districts. The principles affirmed in the case apply broadly to similarly situated higher-need, lower-wealth districts across New York State: all children can learn, students with greater needs require greater support and the State bears the ultimate constitutional responsibility to ensure sufficient educational resources. In that sense, the case has statewide implications for school finance policy and educational equity.

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Following the decision, the State moved to fully fund Foundation Aid on a statewide basis, but the plaintiffs have continued to argue that full phase-in of the existing formula does not, by itself, satisfy the constitutional standard if the formula remains distorted or insufficiently responsive to actual student need. The case is now in the remedy phase, where plaintiffs’ counsel and supporting experts continue to press for a constitutionally sound, evidence-based funding formula grounded in real educational costs and clearly defined student need. SCSD continues to support that effort through advocacy, data analysis and engagement with nationally recognized education finance scholars.

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Rockefeller Institute Foundation Aid Study: In the enacted 2024-25 New York State budget, the State authorized the Rockefeller Institute of Government to conduct a comprehensive review of the Foundation Aid formula, building on years of litigation, advocacy and growing concern about whether the formula still reflects the actual cost of providing students with the opportunity for a sound basic education. That concern has been central to SCSD’s work for decades and was underscored by the issues raised in Maisto et al. v. State of New York.

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Released in December 2024, the Rockefeller Institute’s report concluded that, while Foundation Aid was a landmark funding reform when enacted, several of its components have become outdated and out of step with current district needs and responsibilities. The report presented policymakers with a detailed menu of options to modernize the formula, including updating poverty measures, refining regional cost factors, better accounting for the instructional needs of English Language Learners and removing certain elements that may be more appropriately handled through separate categorical aids.

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SCSD played an important role in that process. The Association provided testimony and data to the Rockefeller Institute during its public engagement process, alongside the expertise of nationally recognized school finance scholar Dr. Bruce Baker. The Association’s website notes that this testimony and data were repeatedly cited in the Institute’s final report, reinforcing long-standing concerns that the current Foundation Aid formula does not adequately serve higher-need, lower-wealth districts.​

 

Small City School Districts' Timeline 

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1980s

• 1985 – SCSD founded to champion and prioritize small city school districts’ issues.

• 1987 – Preserved $100 million annually in HURD Aid; later froze phase-out from 1994 to 2007, saving districts hundreds of millions statewide.

• Consistently opposed restrictive budget vote legislation from 1986-1995, safeguarding fiscal stability.

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1990s

• 1993 – Authored Chapter 356 of the Laws of 1993, reforming Industrial Development Agencies (IDAs) to ensure PILOT sharing with school districts and district representation on IDA boards. This generated tens of millions in new revenue for schools.

• 1996–1997 – Supported governance reforms under Chapter 171, improving budget passage rates and mitigating the impact of budget defeats, which occur in small cities at twice the statewide average.

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2000s

• 2002 – Secured Special Services Aid for districts not served by BOCES (Albany, Amsterdam, Troy, Newburgh, Niagara Falls). Today, Albany receives $1.32 million annually and Newburgh receives $5.22 million annually.

• 2005 – Filed NYSASCSD v. State of New York to demand school finance reform. Though dismissed on procedural grounds, the case spotlighted inequities and paved the way for stronger litigation.

• 2008 – Joined support of plaintiffs in Maisto et al. v. State of New York, a key adequacy case still active today.

• Filed amicus briefs in the landmark Campaign for Fiscal Equity (CFE) case, which established Foundation Aid. 

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2010s

• 2017 – In Maisto et al., the Appellate Division ruled that the State failed to provide a sound basic education to small city districts, advancing the case into its remedy phase.

• Continued advocacy for full funding of Foundation Aid.

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2020s

• 2021 – Appellate Division, Third Department issued a unanimous decision in Maisto, finding the State failed to provide a sound basic education to at-risk students in small city districts.

• 2023 – Voters approved a constitutional amendment removing the special constitutional debt limitation for small city school districts.

• 2023 – Chapter 596 of the Laws of 2023 established a 10% statutory debt limit, aligning small city districts with other fiscally independent districts.

• 2024 – Provided testimony and data, alongside Dr. Bruce Baker, informing the Rockefeller Institute’s Foundation Aid study.​

• 2024–2025 – Advanced state aid reforms, contributing to increased funding for high-need, lower-wealth districts.

• 2025 – Governor signed A.2318/S.6637 into law as Chapter 565 of the Laws of 2025, allowing small city districts to subtract building aid from debt calculations, further advancing structural equity.